to defraud the Government. The returns are made under oath, yes, but that is a technicality which does not get the revenue. We have to use other methods.

Mr. BORDERS. You have spoken about the packers and about South American profits, do you refer to Morris & Co.?

Mr. MARSH. I am talking about Armour & Co. in this letter.
Mr. BORDERS. That is what I want to know.

Mr. MARSH. I have not taken up Morris & Co., I have confined myself to this immediate proposition.

Mr. BORDERS. If you had confined your remarks to Armour & Co. and had not constantly referred to "the packers" I would not have said a word.

Mr. MARSH. I have not noticed any difference in the methods of the Big Five, in what Mr. Weld calls an accident of continuity of percentages. I was talking of one thing, that is their South American profits. I thank you very much.

The CHAIRMAN. Mr. Burke, are you ready to proceed?
Mr. BURKE. Yes, sir.

The CHAIRMAN. You may proceed, Mr. Burke.

STATEMENT OF MR. E. L. BURKE, VICE PRESIDENT AMERICAN NATIONAL LIVE STOCK ASSOCIATION, AND VICE CHAIRMAN OF THE MARKET COMMITTEE, OMAHA, NEBR.

Mr. BURKE. Mr. Chairman and gentlemen of the committee, I am representing my own personal views in my statement this morning. While I am one of the vice presidents of the American National Live Stock Association and the vice chairman of the market committee, I will state that in my official capacity I have appeared before various committees and testified in favor of regulatory legislation. I testified in January, 1919, on the Sims bill, H. R. 13324, and at the same time before the Senate Committee on the Kendrick bill, S. 5305. Last September I also testified on the Kendrick and Kenyon bills, respectively, S. 2199 and S. 2202. In all of those instances I spoke both in my official capacity and my private capacity.

I might offer a word of explanation with regard to my reason for giving my personal views at this time. I have not had an opportunity for many weeks to consult with the other members of the market committee and two members of the market committee have already appeared before this committee officially representing the views of our association, Mr. O'Donel, first vice president, and Mr. Charles Carey, of Wyoming. The views of our association are also so well known through our president, Senator Kendrick, and the public statements of our market committee, that I feel it is entirely unnecessary to state the views of our association on the general subject of legislation.

There has been some question raised here by certain members of our association who have attempted to muddy the waters as to the real attitude of our association, they have spoken in opposition to legislation and have attempted to make it appear that there was a considerable difference of opinion on the part of the members of our association. Nothing could be further from the truth than that. As a matter of fact, the record of the American Live Stock Association

on this subject is so clear and unmistakable that any man who would take the trouble to look over the record of our action during the past five years can reach but one conclusion, and that is that the American National Live Stock Association has been the strongest and most persistent agency in working for some kind of legislation that would provide for the Federal regulation of the packing industry and other market agencies.

To bring the matter up to date you have only to read the three resolutions in the report of the market committee and the address of President Kendrick at the Spokane meeting to be entirely convinced on that point. I mention this not that I believe the members of this committee have been deceived at all as to the position, not only of our association, but of practically all the large representative live-stock associations in this country, but it is possible that the public may be somewhat at sea in regard to the matter, because they have not had a chance to see the witnesses and really know their real character.

I might say in this connection that I hope the members of this committee will take into account not only the quantity of the witnesses, but the quality. The opposition to the bills have made a great point in some of their public statements in regard to the numbers of witnesses whom they have been able to produce here to speak in opposition to the bills.

I have before me a little pamphlet dated February, 1920, issued by the Institute of American Meat Packers, and in the introduction, in italics, the following statement occurs-this is speaking of the hearings before the Committee on Agriculture of the United States Senate in regard to the Kendrick and Kenyon bills for the regulation of the meat-packing industry, which were under consideration, and it says:

There were 195 persons before the committee. These came from 33 States and the District of Columbia and represented various lines of business.

Of this large number there were only about 12 who had any criticism to make of the larger packers and some of these were opposed to licensing the packing industry.

Then, I will cite you to another statement which has just recently been issued by the Institute of American Meat Packers along the same lines.

This refers to the hearings on the Anderson bill to license and restrict business, which have just begun before the Agriculture Committee of the United States House of Representatives. In speaking of the hearings on the Anderson bill they say:

There were 21 of the so-called small packers. Of the 195 persons who appeared only about 12 criticized the packers and of these 12 some were opposed to licensing the industry.

Mr. LIGHTFOOT. What are you reading from, Mr. Burke?

Mr. BURKE. A little statement that was recently published by the Institute of American Meat Packers, as I understand it. I do not know who sent this out, but it purports to be from the Institute of American Meat Packers.

Mr. LIGHTFOOT. Is it signed, Mr. Burke?

Mr. BURKE. No; it is not signed. Would you question that this came from the Institute of American Meat Packers?

Mr. LIGHTFOOT. I do not know what it is; I was just trying to find out. I am not questioning it or criticizing it, but I am just trying to find out.

Mr. BURKE. I think possibly it may refer back to this other summary which I referred to in the first place.

Mr. LIGHTFOOT. I think it does.

Mr. BURKE. I think it does refer back to this. The point is this, that we who are in favor of this bill do not claim to be able to compete with the opposition in our ability to furnish volume of witnesses. We have not the power of organization and means to bring numbers down here to testify in favor of this bill. As this committee is perfectly well aware, the producers and consumers of this country are widely scattered; there is no organization and no means available to bring men down here or to influence then to come down here to testify for these bills. The men who come down here and who are in favor of the bills, I believe, mostly come down on their own initiative and are very representative in their character. I hope the committee will take that into consideration in considering the quality of the testimony.

Up to date, gentlemen, the discussion, as far as I have been able to gather, has been very largely confined to the pros and cons of the proposition whether or not there should be any legislation. I think that has been the principal feature of the thing and has been pretty thoroughly exhausted.

With your permission, I will assume in my statement that some sort of legislation is necessary, and that the main point is to discuss the kind of legislation.

I might say to the members of this committee in the beginning that I am appearing to support the Gronna bill with such modifications, changes, and additions as may be necessary to strengthen the bill and to make it perfectly sound economically. I assume that the end sought by legislation is to bring about a condition where the consumers of this country will be able to purchase meat and food products at the lowest possible cost consistent with a fair return to the producer, to the manufacturer, and to the distributor when they are performing necessary service by methods economically sound.

In support of my contention that legislation is needed, I do not believe that I could cite any higher authority than Mr. Hoover, who had about a year's experience in administering the license under which the packers were operating. He, at least, could not be accused of being prejudiced against the packing industry as such, and I am going to read from a letter of Mr. Hoover's which was released for publication on February 19, 1919. It was a confidential report to the President under date of September 11, 1918.

I will read just the high spots in the letter, and then I will file it with the committee in its entirety:

The President has directed the publication of a confidential report made to himself by Herbert Hoover, United States Food Administrator, nearly six months ago, in order to establish the real position of Mr. Hoover and the Food Administration on the control of the Chicago packing industries. In this report Mr. Hoover again reiterated his former advice of the national danger from this growing domination of the Nation's food and strongly recommended constructive legislation at the hands of Congress rather than the doubtful stretch of temporary war powers of the Government as being the only method by which a permanent solution can be obtained.

That is the explanation. ·

Now I am going to quote from Mr. Hoover's letter to the President: I scarcely need to report the views that I expressed to you nearly a year ago, that there is here a growing and dangerous domination of the handling of the Nation's foodstuffs.

That is one quotation.

Added to this was the application of refrigeration processes for the preservation of meat, which at once extended the period of preservation and the radius of distribution from the slaughter centers, enabled larger slaughtering nearer the great western producing area, and further contributed to the centralization of the industry.

This enlarged scope, particularly the refrigeration operations, require not only the expensive primary equipment, but a network of refrigerator cars, icing stations, and cold storage at distribution points. This special car service in products is of the nature of the Pullman service; it must traverse railroad lines independent of ownership, and, moreover, it is seasonal and varies regionally in different seasons. For each railway to have foreseen and to have provided sufficient of this highly specialized equipment is asking the impossible, and, in any event, no particular railway could be expected to provide sufficient of these cars to answer the shifting of seasonal and regional demands outside its own lines.

To quote again:

Their hold on the meat and many other trades has become so large through the vast equipment of slaughter houses, cars, and distributing branches, and banking alliances which each of the five controls, that it is practically inconceivable that any new firms can rise to their class, and in any event even sharp competition between the few can only tend to reduce the number of five and not increase it.

Mr. BORDERS. What is that last sentence?

Mr. BURKE. "And in any event," from there on?

Mr. BORDERS. Yes, sir.

Mr. BURKE. "And in any event even sharp competition between the few can only tend to reduce the number of five and not increase it."

To quote again :

It is certain, to my mind, that these businesses have been economically efficient in their period of competitive upgrowth, but as time goes on this efficiency can not fail to diminish and, like all monopolies—

I am sorry to mention that word "monopolies," even to quote it, because I know that it is not a pleasing word.

Mr. BORDERS. You have mentioned it so often that once more will not hurt.

Mr. BURKE (reading):

Like all monopolies, begin to defend itself by repression rather than by efficiency. The worst social result of this whole growth in domination of trades is the undermining of the initiative and the equal opportunity of our people and the tyranny which necessarily follows in the commercial world. The Federal Trade Commission's recommendations fall into three parts: (a) That the Railroad Administration take over all animal and refrigeration car services.

(b) That they take over the stockyard terminals.

(c) That the Federal Government itself take over the packers' branch houses, cold-storage warehouses, etc., with a view, I assume, to the establishing of equal opportunity of entrance into distribution among all manufacturers and traders.

Mr. YOUNG. That was recommended as a war power?

Mr. BURKE. No, sir. This is recommended as the permanent basis. for putting the entire business of distributing live-stock products on a sound economical basis for the future.

Mr. WILSON. Whose recommendation is that; Mr. Hoover's?
Mr. BURKE. Yes, sir.

Mr. TINCHER. Mr. Hoover did not recommend that?

Mr. BURKE. No; this is a letter, I will say, containing his recommendations to the President as to the proper steps to be taken in connection with the whole matter.

Mr. YOUNG. I must have missed something, then. He recommends as a permanent policy of this Government that the Government take over the distributing agencies?

Mr. BURKE. No; I am just coming to that. I guess you did not hear what I said.

Mr. YOUNG. I must have missed a sentence.

Mr. BURKE. He said that the " Federal Trade Commission's recommendations fall into three parts," and then he gives the three parts, and then he goes on to say to what extent he agrees or disagrees with these recommendations. That is what I am coming to, but what I read before-that is, the quotations I have just given-represent Mr. Hoover's own opinion of the situation as it exists.

Mr. YOUNG. I missed one sentence.

Mr. BURKE. I am quoting now from what the Federal Trade Commission recommended.

Mr. TINCHER. The representatives of the Federal Trade Commission since they made that recommendation have been before this committee and qualified their recommendation to a considerable

extent.

Mr. BURKE. Yes, sir; to some extent, although not substantially in regard to what you would call the taproots of monopoly. They contend, as they always have contended, that the stockyards, refrigerator cars, and the branch-house facilities

Mr. TINCHER (interposing); As to the method of handling them by legislation?

Mr. BURKE. The method of handling them may have been somewhat modified.

The first of these recommendations was "That the Railroad Administration take over all animal and refrigeration-car services." Here is what Mr. Hoover says in regard to that:

As to the first part of this recommendation, on car service, I am in full agreement, and may recall to you that soon after its installation we recommended that the Railway Administration should take over and operate all private car lines in food products.

Mr. WILSON. What is the date of that letter?

Mr. BURKE. That was what I was going back to. This letter was written on September 11, 1918.

Mr. WILSON. That is about a year after Mr. Hoover came to this country?

Mr. BURKE. He had the packers under license since November 1, 1917, and had had a year's experience in handling the situation. The CHAIRMAN. Is that a fair-sale practice?

Mr. BURKE. No; not quite. That did not come until a couple of months later.